The Supreme Court on Friday ordered the setting up of a five-judge Constitution Bench to test the validity of a November 8 demonetisation notification and the legality of the government’s implementation of the policy.
A Bench of Chief Justice of India T.S. Thakur and Justices A.M. Khanwilkar and D.Y. Chandrachud said the issue of demonetisation was of public importance and has a far-reaching consequence, thus requiring a larger Bench to hear nine questions of law framed by the Bench.
The questions include whether the RBI notification and the “limited withdrawal” of one’s own money were violations of Articles 14 (right to equality), 19 (freedom of speech, trade, occupation, etc), 21 (fundamental right to protection of life) and 300A (right to property) of the Constitution. The court also wants the Constitution Bench to decide whether the very implementation of the notification suffered from “substantive and procedural unreasonableness.”
The Constitution Bench will now be set up by the Chief Justice of India.
The court refrained from providing any drastic interim relief in terms of complaints raised by the petitioners, including that banks were not honouring the notified Rs. 24,000 weekly withdrawal limit of money and the expiry of exemptions granted to the public’s use of demonetised Rs. 1,000 and Rs. 500 notes for essential services and institutions like railway ticketing and payments at government hospitals and pharmacies.
‘Govt. is the best judge’
The Supreme Court said it trusted the government to be the best judge of its own economic and fiscal policies. The court placed its faith in the government’s assurances that the policy was triggered to weed out black money, counterfeit currency and choke terror funding.
Noting that “no other directions are possible at this stage,” the court addressed each one of the three immediate reliefs sought by the petitioners in the Supreme Court, starting with the allegation of discrimination and freeze on withdrawals and deposits in district central co-operative banks (DCCBs).
Here, the court accepted the government’s assurance that the Rs. 8,000 crore, collected by a total 367 DCCBs between November 10 and 14, would be allowed to be deposited with the RBI after a “100 per cent audit” of KYC of the account holders by NABARD.
The government said this amount would then be replaced with the new currency.